Drop shipping has been a hotly debated topic here on the Seller Forums. And there’s good reason. It’s a popular concept and can be a good way to jump start your business, but it’s easy to do it incorrectly—which can lead to serious consequences.

Today let’s explore drop shipping business models and policies via some dos and don’ts.

But first--what is drop shipping, exactly?

Drop shipping on Amazon refers to the process of allowing a third-party to fulfill orders to customers on your behalf. The main point for sellers to know is that drop shipping is not an acceptable practice unless it’s clear to the customer that you’re the seller of record.

With that in mind, let’s review the key dos and don’ts every seller must keep in mind in order to comply with Amazon’s Drop Shipping policy.

Drop shipping: the DO list

If you intend to fulfill orders using another company’s fulfillment service, a third-party logistics company, or a drop shipper, you must always:

• Have an agreement with your supplier where you are the only seller of record and the only entity identified as the seller of your products on all packing slips, invoices, external packaging, or any other information included or provided in connection with the products.

• Remove any packing slips, invoices, external packaging, or other information identifying a different seller or third-party supplier prior to shipping the order.

• Remain responsible for accepting and processing customer returns, and always comply with the Business Solutions Agreement (BSA) and applicable Amazon policies.

Drop shipping: the DON’T list

Examples of Amazon Drop Shipping Policy violations include:

• Purchasing products from a third party, including Amazon or another seller in Amazon’s stores, and having that third party ship directly to customers, if the shipment does not identify you as the seller of record or if anyone other than you (including the third party) appears on packing slips, invoices, or external packaging, it is strictly prohibited without exception.

• Shipping orders with packing slips, invoices, external packaging, or other information indicating a seller name or contact information other than your own is also strictly prohibited.

Be sure to check out the drop shipping video in Seller University for more information on how to appropriately drop ship on Amazon—as well as the repercussions if you don’t.